The U.S. government has charged the founder and former CEO of cryptocurrency exchange FTX with a host of financial crimes, alleging he intentionally deceived customers and investors to enrich himself and others.
Federal prosecutors said Bankman-Fried devised “a scheme and artifice to defraud” FTX’s customers and investors beginning in 2019, the year it was founded. He illegally diverted their money to cover expenses, debts and risky trades at the crypto hedge fund he started in 2017, Alameda Research, and to make lavish real estate purchases and large political donations, prosecutors said in a 13-page indictment.
Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee at Rayburn House Office Building on Capitol Hill Dec. 8, 2021 in Washington, D.C. But since FTX’s implosion, Bankman-Fried and his company have been likened to other disgraced financiers and companies, such as Bernie Madoff and Enron.
U.S. authorities said they will try to claw back any of Bankman-Fried’s financial gains from the alleged scheme. Before his arrest, Bankman-Fried had been holed up in his luxury compound in the Bahamas. U.S. authorities are expected to request his extradition to the U.S. “We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler.
For example, Bankman-Fried said he did not “knowingly” misuse customers’ funds, and that he believes angry customers will eventually get their money back.
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